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Earnings Preview: Hain Celestial - Analyst Blog

The Hain Celestial Group Inc.
(
HAIN
), a leader in natural food and personal care products, is slated
to report its first-quarter 2013 financial results on Thursday,
November 1, 2012.

The current Zacks Consensus Estimate for the quarter is 40
cents a share that reflects a growth of 37.9% from the prior-year
quarter's earnings. The estimates in the current Zacks Consensus
range between a low of 35 cents and a high of 44 cents a share.
The Zacks Consensus revenue estimate is pegged at $371 million
for the quarter under discussion.

Recap of Fourth-Quarter 2012

Hain Celestial posted better-than-expected fourth quarter
results on August 22, attributable to a rise in consumption,
innovative marketing and expanded distribution. The quarterly
earnings of 47 cents per share surpassed the Zacks Consensus
Estimate by a couple of cents, and surged 30.6% from last year's
36 cents.

Total revenue bolstered 22.3% year over year to $350.8
million. However, including sales of the United Kingdom
private-label chilled ready meals operations (discontinued
business), revenue came in at $373.8 million, up 28%. Operating
profit grew 26.6% to $36.2 million, whereas operating margin
expanded 36 basis points to 10.3%.

The company expects to sustain strong momentum as it remains
well positioned to capitalize on the growing global demand for
organic products through acquisitions. Management now expects
sales to be in the range of $1.600 billion to $1.615 billion and
earnings between $2.10 and $2.20 per share for fiscal 2013.

Zacks Agreement & Magnitude

The Zacks Consensus Estimate for the first quarter of 2013
hasn't shown any movement in the last 7 days, as none of the
analysts revisited their estimates. However, in the last 30 days,
the Zacks Consensus Estimate dropped by a penny as 4 out of 15
analysts covering the stock lowered their estimates.

Positive Earnings Surprise History

With respect to earnings surprises, Hain Celestial has topped
the Zacks Consensus Estimate over the last four quarters in the
range of 3.6% to 8%. The average remained at 5.5%, suggesting
that Hain Celestial has outperformed the Zacks Consensus Estimate
by the same magnitude in the trailing four quarters.

Closing Comment

Hain Celestial offers a healthy investment opportunity for
investors even in a volatile market. The stock is poised to surge
as the economy gradually revives and the appetite for organic
foods gets bigger. Acquisitions have played a key part in Hain
Celestial's strategy of building market share. These acquisitions
have not only widened the company's geographical presence, but
have also provided opportunities to cross-sell products in the
U.S., Canadian, and European markets. The company recently
acquired Premier Foods plc's portfolio of brands that includes
Hartley's, Sun-Pat, Gale's, Robertson's, and Frank Cooper's.

Going forward, we believe that the company will be able to
mitigate the cost pressures through increased productivity and
efficient pricing. Moreover, Hain Celestial has undertaken a
number of initiatives to improve its performance and has put
itself on the growth trajectory. The company's Stock Keeping Unit
("SKU") rationalization program has helped eliminate SKUs, which
had lower sales volume or weak margins.

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